Author: Fiona Craig

European equities moved lower on Wednesday as investors assessed rising energy prices, further developments in the Middle East and expectations for an interest rate increase from the European Central Bank.

The pan-European STOXX 600 declined 0.4%. Industrial, consumer discretionary and interest-rate-sensitive growth stocks were among the sectors trading lower, while energy and defence shares recorded gains.

Germany’s DAX fell 0.4%, France’s CAC 40 declined 0.6% and London’s FTSE 100 was down 0.2%.

Brent trades close to $100 amid Middle East developments

Brent crude futures rose 1.6% to $99.49 a barrel, leaving the international oil benchmark close to the $100 level.

The increase followed attacks on Tuesday by Iranian-backed Houthi forces in Yemen against several cities in Saudi Arabia.

The developments also included U.S. strikes against multiple Iranian oil tankers and an Iranian missile strike targeting a U.S. military base in Jordan.

Oil markets have also been monitoring shipping disruptions around the Strait of Hormuz and attacks affecting regional infrastructure as participants assess potential implications for Middle Eastern energy supplies.

Higher crude prices can increase energy and input costs for European companies and households, adding to the inflation considerations facing investors and policymakers.

Markets await ECB interest rate decision

Money markets were pricing in an approximately 25-basis-point interest rate increase from the European Central Bank at Thursday’s policy meeting, which would take the deposit facility rate to 2.50%.

Expectations for a rate increase followed preliminary Eurozone inflation figures showing an acceleration in headline consumer price inflation, including a double-digit increase in the energy component.

Core European sovereign bond yields remained near multi-year highs as markets assessed the potential path of interest rates and inflation.

Following Thursday’s ECB decision, investors will also be monitoring U.S. inflation data scheduled for later in the week.

Euro zone government bond yields remained near multi-year highs on Wednesday as investors assessed higher energy prices and expectations for an interest rate increase from the European Central Bank at its Thursday policy meeting.

Germany’s benchmark 10-year Bund yield traded around 3.382%, remaining close to the highest level since August 2011 reached during the previous session.

At the shorter end of the yield curve, Germany’s two-year Schatz yield was around 2.984%, near its highest level in two years.

Money markets were pricing in an approximately 25-basis-point increase in ECB interest rates at Thursday’s meeting. Market participants were also assessing the potential implications of higher energy import costs for inflation and the future path of monetary policy.

Energy prices remained a focus for European bond markets. Brent crude traded just below $100 a barrel following an escalation in the Middle East and developments affecting shipping routes in the Persian Gulf.

European natural gas prices were also elevated. Dutch TTF wholesale natural gas futures traded close to their highest levels since 2022 amid delayed liquefied natural gas shipments and concerns surrounding the replenishment of storage inventories ahead of the winter heating season.

The moves followed attacks on Tuesday by Iranian-backed Houthi forces in Yemen against several Saudi Arabian cities.

The developments also included U.S. strikes against multiple Iranian oil tankers and an Iranian missile strike targeting a U.S. military base in Jordan.

Alongside Thursday’s ECB interest rate decision, bond market participants are awaiting U.S. Producer Price Index and Consumer Price Index data scheduled for later in the week.

Amgen Inc. (NASDAQ:AMGN) and AstraZeneca PLC (LSE:AZN) reported results from a late-stage clinical trial evaluating a combination of Amgen’s Imdelltra and AstraZeneca’s Imfinzi as a maintenance treatment for extensive-stage small-cell lung cancer.

The trial compared Imdelltra plus Imfinzi with Imfinzi alone in patients whose disease had not progressed following standard initial therapy.

According to the companies, the combination demonstrated improvements in overall survival, progression-free survival and response rate compared with Imfinzi alone. They also said no new safety concerns were identified during the trial.

Imdelltra received accelerated approval from the U.S. Food and Drug Administration in 2024 for extensive-stage small-cell lung cancer, followed by traditional approval in 2025.

The treatment generated $513 million in sales for Amgen last year. Cancer treatments account for approximately 23% of the company’s total revenue.

Imdelltra is part of Amgen’s portfolio of bispecific antibodies. These treatments are designed to connect cancer cells with immune cells, allowing the immune system to target the cancer cells.

Aberdeen Group plc (LSE:ABDN) has appointed Torbjörn Magnusson to its board as a non-executive director and chair-designate, with his appointment as chair subject to regulatory approvals.

Magnusson is expected to succeed Jonathan Asquith, who has been serving as interim chair and will remain in the position until Magnusson’s appointment becomes effective.

The appointment follows Aberdeen’s announcement last year that Sir Douglas Flint would step down as chair by the company’s 2026 annual general meeting.

“We are delighted to have Torbjörn joining the Board as Non-Executive Director and Chair-designate,” Asquith said. “He is a highly regarded and versatile international business leader who brings more than 30 years of leadership experience spanning a breadth of CEO, Non-Executive Director, and Chair roles across large financial services businesses.”

Magnusson was chair of Nordea Bank Abp from 2019 to 2022 and deputy chair from 2022 to 2023. He also served as chief executive officer and president of Sampo for almost six years until 2025, during which time the company completed its £1.7 billion acquisition of Hastings.

He previously served as president and CEO of If P&C Insurance between 2002 and 2019 and as its chair from 2019 to 2025. Magnusson is currently a non-executive director of Canopius Group and recently stepped down as a non-executive director of Hastings Group.

“Aberdeen has transformed its performance materially over the last few years, building the foundations for long-term value creation,” Magnusson said. “I am very much looking forward to working with the Board, and with Jason and his management team, to help the company continue that progress and achieve its ambitions.”

Magnusson will receive an annual fee of £475,000.

Nexteq (LSE:NXQ) reported revenue of $26.7 million for the first half of 2026, a decline of 34% year-on-year, as lower demand from major gaming customers affected trading.

The technology solutions provider recorded an adjusted pretax loss of $4.0 million and a statutory pretax loss of $4.7 million. Adjusted loss per share was $0.08, while statutory loss per share was $0.09.

Gross margin declined to 30.3%, with Nexteq citing higher component costs, the annualisation of Everi’s consolidation and increased component pricing. Performance from Densitron provided a partial offset.

The company said lower volumes from major gaming customers reflected higher product costs and tariffs. Nexteq implemented restructuring and other cost-saving measures during the first half, which it said generated annual overhead savings of $1.3 million.

Nexteq returned $5.7 million to shareholders through share buyback programmes during the period.

The company maintained its full-year 2026 trading guidance, with order coverage standing at 83% at the end of August. Management expects challenging conditions in the land-based gaming market to continue through 2026 and 2027.

Nexteq also expects its cash balance to improve during the second half, supported by the unwind of a Taiwan mortgage and a property sale.

WAG Payment Solutions (LSE:EWG) raised its full-year 2026 adjusted cash EBITDA guidance to between €110 million and €115 million, narrowing its previous range of €105 million to €115 million.

The payment solutions provider reported first-half net revenue of €179.5 million, an increase of 10.7% year-on-year, while adjusted EBITDA rose 10.5% to €70.6 million. The adjusted EBITDA margin was 39.3%.

Pretax profit for the period was €8.4 million. Basic earnings per share declined compared with the prior-year period, which the company attributed primarily to higher finance expenses and foreign exchange losses.

Following the end of the reporting period, WAG Payment Solutions paid a special dividend of 1.5 pence per share, representing a total payment of €12.1 million.

For the full year, the company continues to expect low double-digit net revenue growth and an adjusted EBITDA margin of approximately 40%. It also expects net leverage to be below 2.0 times.

Revenue growth during the first half was supported by the expansion of toll services and payment solutions. The number of active trucks increased 7% year-on-year.

WAG Payment Solutions said the migration and integration of customers onto its Eurowag Office platform contributed to increased customer engagement and use of its services.